TMI Blog2021 (3) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. In the said decision of the Hon'ble Supreme Court, the facts were that the appellant therein had it sugar factory in Kerala State and pursuant to a Government Order issued by the Tamil Nadu Government, specifically permitting them to open office in Coimbatore and Pollachi Taluks only with a view to and exclusively for the purpose of transporting to their factory in Kerala, the Hon'ble Supreme Court held that such sale was an interstate sale. As rightly contended by the learned counsel for the petitioner, the facts dealt with in the said decision were peculiar and the first respondent was not justified in issuing show cause to exercise his suo motu power solely based on the said decision, which dealt with on different factual position - The first appellate authority after examining the invoices and the delivery challan, has recorded a finding of fact that a sale was completed in Tamil Nadu and any transportation, which had taken place after the sale at the instance of the buyer from Tamil Nadu to any other State, cannot bring it under the purview of interstate sale in the hands of the petitioner. One more important aspect which has been appealed is whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition filed to rectify the order impugned in W.P.No.35839 of 2003. 5.Thus, among the three writ petitions, W.P.No.35839 of 2003 is the lead case and the result of the other two writ petitions would depend upon the decision to be arrived at in W.P.No.35839 of 2003. 6.Heard Mr.V.Srikanth, learned counsel for the petitioner in W.P.No.35839 of 2003 and W.P.No.9363 of 2004 and Ms.L.Maithily, learned counsel for the petitioner in W.P.No.6254 of 2004 and Ms.G.Dhanamadhri, learned Government Advocate for the respondents in all the three writ petitions. 7.The petitioner was finally assessed for the year 1986-87 on the total and taxable turnover of ₹ 1,49,09,403/- and ₹ 86,04,729/- respectively, as per the assessment order dated 30.03.1988, under the CST Act. The petitioner filed an appeal before the Appellate Assistant Commissioner (CT) IV, Chennai, disputing the levy of tax at 10% on a turnover of ₹ 44,09,687/- on the ground that the turnover represents local sales only assessable to sales tax under the TNGST Act and not direct interstate sales. 8.The First Appellate Authority allowed the appeal by order dated 20.01.1997 and held the transactions to be local s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is further submitted that the decision in Co-operative Sugars (Chittur) Ltd. (supra) cannot apply to the facts of the petitioner's case, as the first appellate authority had given a specific finding that the prices quoted were ex-godown and the purchasers had themselves taken delivery of the goods from the petitioner and transported the goods themselves to Pondicherry. Further, the first respondent did not take note of the decision relied on by the petitioner reported in S.K.Shanmugavelu (supra) in their reply to the show cause and non-consideration of the decision will render the impugned proceedings invalid and illegal. Further, it is submitted that in the said decision, on identical facts, it was held to be local sales and taking note of the decision, the proposal made by the first respondent in the show cause notice dated 04.05.1998, ought to have been dropped. On the above grounds, the petitioner seeks for setting aside the impugned order. 12.The Revenue seeks to sustain the impugned proceedings by contending that the dealers themselves had reported the turnover in their monthly returns filed under the CST Act as interstate sales and paid tax at 4% along with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained the signature of the purchasers in token of having received the goods, however, they have issued Form XX for the transportation of goods from Madras to Pondicherry showing the petitioner as the consignor and the purchasers as the consignee. 15.The appellate authority took note of the petitioner's submission that they have issued Form XX declaration only at the instance of the purchasers and this would not change the character of the transaction as a local sale. Further, the appellate authority took note of the endorsement in the delivery challan endorsing receipt of the material in good condition and the signature of sale of the purchasers. Thus, the first appellate authority concluded that it is clear that the transactions have been completed as a local sale by the petitioner, as the delivery has taken place at Madras. 16.The first appellate authority took note of the decision of this Court in the case of S.K.Shanmugavelu (supra) and held that if the goods were delivered to the buyers and they transported the goods on their own responsibility, some times in the lorry arranged by the assessee and some times in the lorry arranged by the buyers themselves, the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Supreme Court held that the movement of goods from Tamil Nadu to Kerala was an incident and was inextricably connected with the sale/purchase and that the purchase/transport was part of one transaction. Thus, the said decision was rendered on the fact situation that the purchase and transport could not be disassociated and there was no break between the purchase and movement of goods to another State. 20.As rightly contended by the learned counsel for the petitioner, the facts dealt with in the said decision were peculiar and the first respondent was not justified in issuing show cause to exercise his suo motu power solely based on the said decision, which dealt with on different factual position. The first appellate authority after examining the invoices and the delivery challan, has recorded a finding of fact that a sale was completed in Tamil Nadu and any transportation, which had taken place after the sale at the instance of the buyer from Tamil Nadu to any other State, cannot bring it under the purview of interstate sale in the hands of the petitioner. 21.One more important factor, which we need to take note of is the facts of the case in Co-operative Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was not made to the petitioner and therefore, the petitioner addressed the Assessing Officer by letters dated 10.06.1998 and 15.07.1998 requesting for immediate refund. Since no orders were passed, the petitioner filed W.P.No.10928 of 1998 to direct the Assessing Officer to refund the excess tax paid. The writ petition was disposed of by order dated 13.02.2008, with a direction to refund the said sum within a period of one month from the date of production of the order with interest at 12% from 28.01.1998. The petitioner has forwarded the copy of the order passed in the writ petition and requested for complying with the direction. Thereafter, the Assessing Officer sanctioned refund of ₹ 2,22,818/- as against the refund of ₹ 2,42,405/- as ordered in the writ petition. 26.On 21.03.2003, the Commercial Tax Officer, Royapettah II Assessment Circle, issued a letter enclosing a refund voucher for ₹ 2,22,818/- along with the application in Form-XXXIII for claiming interest under Section 22(4) of the TNGST Act. The petitioner is stated to have complied with whatever was called upon by the Assessing Officer by furnishing the required particulars by letter dated 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner dated 28.05.2003, has been set aside by us in W.P.No.35839 of 2003. Therefore, the contention advanced by the respondent for refusing to pay interest by relying upon the order of the Joint Commissioner is no longer tenable. Therefore, the petitioner is entitled for payment of interest. However, on account of the events, which have taken place in the interregnum, 50% excess tax, which was refunded has been paid back by the petitioner to the Department and the remaining 50% is stated to be lying with the petitioner from 29.08.2003. Therefore, it is necessary that the interest should be re-worked taking note of the events, which have taken place, after the order passed by the first appellate authority and the order passed by the Joint Commissioner in exercise of suo motu revision and also the fact that 50% of the amount of excess tax, which was initially refunded, has been paid back by the petitioner to the Department. Further, the respondent-Department cannot deny payment of interest to the petitioner, in the light of the positive direction in W.P.No.10928 of 1998 dated 13.02.2006 wherein, the Court issued a positive direction to pay the interest at 12% per annum. 30.Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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